Bessie Liu

HashKey Capital has raised half a billion dollars for the cryptoasset manager’s latest vehicle. 



The fund, HashKey Fintech Investment III, is designed to key in on “the growing opportunities in emerging [digital asset] markets,” the firm said in a statement on Tuesday.&nbsp;



It’s a notable $500 million haul in <a href="https://blockworks.co/news/bargain-basement-opportunity-for-crypto-volatility-traders" target="_blank" rel="noreferrer noopener">unsteady crypto markets</a>, and the funds have been earmarked to invest in a number of cryptocurrency and blockchain initiatives globally — under that emerging markets focus. Limited partners, according to HashKey, include sovereign wealth funds and family offices.&nbsp;



HashKey has “weathered at least three cycles in the industry,” according to Dennis Chao, the asset manager’s chief executive. The firm’s parent company, Hong Kong-headquartered HashKey Group, is known as a specialist in investing in blockchain projects in Asia and was an early backer of <a href="https://blockworks.co/tag/ethereum" target="_blank" rel="noreferrer noopener">Ethereum</a> — dating back to 2015.&nbsp;



“These unique experiences and insights will be invaluable to us in navigating through turbulence,” Chao said in a statement.



Chao’s firm has since backed a number of crypto projects that have since moved into the limelight, including Cosmos, dYdX, Animoca Brands and Polkadot. The cryptoasset manager launched in 2018. 



HashKey Group inspired Ethreum’s upcoming “Shanghai Upgrade,” according to Xia Feng, the investment manager’s chair. Shanghai is slated as the next major upgrade for the Ethereum network and is designed to allow the proof-of-stake blockchain’s validators to withdraw their staked ether, the network’s native token. 



The pending upgrade, which appears to be on track to occur in March, marks the first time validators — which verify transactions on the protocol — would mark the first time validators are able to cash in on their locked up ether, which has been accruing staking rewards. Ethereum <a href="https://blockworks.co/news/ethereum-to-reach-500000-validators" target="_blank" rel="noreferrer noopener">hit half a million</a> validators earlier this month as momentum builds toward Shanghai.&nbsp;



“We have maintained since the first day that the power of blockchain and crypto innovation can create a better future,” Feng said. “Fund III will follow our time-tested investment principles while&nbsp; also looking for game-changers, which would be those that will propel the industry forward into the next stage.”&nbsp;&nbsp;



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HashKey Has ‘Weathered at Least Three Cycles.’ $500M Fund Is Latest Proof.

Jacquelyn Melinek

<div id="highlights-block_620e70fe597d8" class="highlights">
 <ul>
 <li>The Graph supports indexing data from 31 different networks, including Ethereum layer-2 network and compatible layer-1 blockchains</li>
 <li>Key projects for the fund include those building creator economies with NFTs and token design, as well as cross-metaverse identities and DAO tools</li>
 </ul>
 
</div>



A group of six investors joined forces to launch a $205 million ecosystem fund for The Graph, an indexing layer for Web3 and blockchain data.



This Ecosystem Fund isn’t an investment in <a href="https://cms.blockworks.co/semiotic-ai-receives-60m-grant-to-develop-the-graphs-ecosystem/" target="_blank" rel="noreferrer noopener">The Graph</a> — it is a fund that will invest in projects building on its protocol, Tegan Kline, co-founder and business lead at Edge &amp; Node, shared with Blockworks.



<a href="https://cms.blockworks.co/digital-currency-group-completes-600m-debt-capital-raise/" target="_blank" rel="noreferrer noopener">Digital Currency Group</a>, <a href="https://cms.blockworks.co/?s=multicoin#:~:text=Multicoin%20and%20Kraken%20Invest%20Millions%20in%20Crypto%20Startups" target="_blank" rel="noreferrer noopener">Multicoin Capital</a>, Reciprocal Ventures, gumi Cryptos Capital, NGC Ventures and HashKey provided the capital to accelerate the growth and development of projects on The Graph. Additionally, the funds will provide support from a “host of areas” and provide guidance for projects, Craig Burel, partner at Reciprocal Ventures, noted to Blockworks. 



“We believe we can identify promising new technologies and critical components in the decentralized stack and leverage our collective networks to accelerate their proliferation across Web3,” Samantha Bohbot, director of platform at Digital Currency Group, said to Blockworks.



Some key projects they’ll invest in include ones that are building creator economies with NFTs and token design as well as cross-metaverse identities and DAO tools, Andrea Zhang, partner at NGC Ventures told Blockworks.&nbsp;



The Graph uses subgraphs, which are open application programming interfaces (APIs) that use the programming language GraphQL. It supports indexing data from 31 different networks including Ethereum and its layer-2 networks Arbitrum and Optimism, plus Ethereum-compatible Polygon, Avalanche, NEAR protocol, Celo and Fantom.



These subgraphs retrieve blockchain data secured through a decentralized network on DeFi, NFTs (non-fungible tokens) and DAOs (decentralized autonomous organizations), among other things. This means decentralized applications, or dApps, can be permissionless with open APIs instead of relying on single servers.



In 2021, there was tremendous growth for the Web3 developer stack, but there is still work to be done with tooling or “middleware solutions,” Bohbot said.



“We expect [the] <a href="https://cms.blockworks.co/morgan-stanley-sees-8-trillion-metaverse-market-eventually/" target="_blank" rel="noreferrer noopener">metaverse</a> will continue to be the main narrative across the Web3 ecosystem, including <a href="https://cms.blockworks.co/?s=gamefi#:~:text=The%20Sandbox%20Parent%20Animoca%20Brands%20Raises%20%24359M%20to%20Build%20Out%20Open%20Metaverse" target="_blank" rel="noreferrer noopener">GameFi</a>, NFT projects and decentralized metaverse,” Zhang said. “One of the drivers of this trend can be attributed to the rising Web2 metaverse, both in terms of capital attracted and user adoption, which can make more people realize the benefits of decentralized metaverse infrastructure in empowering the creator economy.”



Going forward, The Graph will continue to add support for additional layer-1 and layer-2 blockchains, as well as storage networks to help grow the Web3 ecosystem, Kline said.



The speed and growth of capital and ideas in the crypto industry is unprecedented, causing a constantly shifting narrative, Burel said. Web3 data will be decentralized and The Graph’s network of over 150 validators is helping to drive this seismic shift, he added.



“We continue to be excited about DeFi, Web3 infrastructure, gaming and applications with unique features enabled by Web3 rails,” Burel commented.



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